Microsoft Stock Is Down Over the Past Year While Google and Apple Soared: Can Copilot's 30 Million Users Change That?

Microsoft stock has been unusually slow for a mega-cap tech name. Microsoft stock is roughly flat to down over the past year, while Google and Apple posted much stronger gains, according to 24/7 Wall St. For investors tracking msft stock, the real question is not whether Microsoft still has AI momentum, but whether that momentum can translate into faster earnings and cash flow growth. Reported Copilot adoption, rising Azure expectations, and a fresh analyst upgrade support the bull case, yet heavy capital spending and weaker free cash flow remain the main friction.

Quick Answer

• According to 24/7 Wall St., Microsoft stock returned about -1.28% over the past year, versus about +37.5% for Google and +30.5% for Apple.
• Reported Copilot paid users of 30 million suggest real demand, but that figure was cited by 24/7 Wall St. and is not a confirmed Microsoft disclosure in the materials provided.
• The biggest near-term debate is whether AI revenue growth can outpace AI infrastructure costs, especially after quarterly capital spending rose 110% and free cash flow fell 23%.
• Wall Street still leans bullish on msft stock, with MarketWatch showing an average analyst target of $579.16 and Yahoo Finance citing a new $665 target from Melius.

How Microsoft Stock Has Lagged Google and Apple Over the Past Year

The relative underperformance stands out because Microsoft is still widely viewed as one of the strongest AI and cloud franchises in public markets. According to 24/7 Wall St., Microsoft stock was down about 1.28% over the past year, while Google gained about 37.5% and Apple rose about 30.5%. That gap matters because it shows investors are not treating all large-cap tech names the same way.

Part of the reason may be simple expectations. Microsoft entered the AI cycle as an early favorite thanks to Azure, Copilot, and its broader software ecosystem. When a stock already carries a premium narrative, it often needs more than solid growth to outperform. It needs upside that is both visible and profitable. As of October 5, MSFT traded around $526, up 1.7% on the day, while the broader consensus target cited by 24/7 Wall St. and Yahoo Finance was around $579. Separately, MarketWatch data in the supplied research showed an average target of $579.16, a median of $576.50, and no sell ratings in the listed analyst breakdown.

That combination tells a clear story: sentiment on Microsoft remains positive, but the stock market wants cleaner evidence that AI demand is flowing through to shareholder value, not just headline excitement.

What Copilot's 30 Million Paid Users Could Mean

The most compelling bull argument is that Copilot may be scaling into a meaningful commercial product rather than staying a promising demo. According to 24/7 Wall St., Microsoft has reported 30 million paid Copilot users. Because that figure comes through secondary reporting rather than a company filing in the provided materials, it is best treated as reported rather than officially confirmed here.

Even so, the signal matters. Paid users are more important than broad engagement claims because they suggest customers are willing to assign budget to AI productivity tools. For Microsoft, that matters across multiple layers of the business. Copilot can support Office pricing power, deepen enterprise software retention, and increase the strategic value of Azure infrastructure that runs AI workloads behind the scenes.

Still, user scale alone does not settle the investment case. Investors need to know whether Copilot revenue is growing fast enough to offset the cost of building and running that infrastructure. A big user number can improve confidence in product-market fit, but it does not automatically prove margin expansion.

The Capital Spending and Free Cash Flow Problem

This is where the debate around msft stock gets more serious. According to 24/7 Wall St., Microsoft’s capital spending jumped 110% year over year to about $35.8 billion in the quarter, while free cash flow fell 23%. The broader research materials point in the same direction. Investing.com, cited in the supplied research, noted that Microsoft’s quarterly CapEx reached $30.88 billion in one period, up 84% year over year, while free cash flow fell from $20.3 billion to $15.8 billion.

The exact capital spending figure varies by source and period, but the theme is consistent: Microsoft is spending aggressively to support AI demand, and that spending is pressuring cash generation. For long-term investors, this is not automatically bearish. Large infrastructure cycles can create future competitive advantages. But for valuation, timing matters. Markets usually reward revenue growth quickly and punish free cash flow compression just as quickly.

There is also concentration risk around the broader AI ecosystem. The supplied research highlights investor concern that Microsoft’s AI narrative may be overly tied to OpenAI. Some of those dependency estimates come from secondary analysis and should not be treated as confirmed company disclosures, but they still explain why investors are watching quality of demand, not just quantity of demand.

Why Melius Upgraded Microsoft Stock to Buy

On October 5, Yahoo Finance reported that Melius analyst Ben Reitzes upgraded Microsoft from Hold to Buy and set a $665 price target. That is well above the broader consensus range in the supplied research and suggests Melius sees room for the market to re-rate the stock if AI execution improves.

The logic behind the call is worth noting. According to the provided context, Reitzes raised fiscal 2027 and fiscal 2028 earnings-per-share estimates by 2% and 4%, and projected fiscal 2029 EPS of $30.77, roughly 7% above consensus. He also pointed to early traction in Agent 365, with nearly 40 million agents reportedly registered in the first two months after the control plane launch.

Melius also outlined a long-term model under specific assumptions: revenue growth of 14.8% annually, a 39.5% net margin, and 15% EPS growth. Under those assumptions, the stock could reach about $1,145 by mid-2031. That is not a forecast investors should treat as assured. It is a scenario analysis based on favorable execution and sustained AI monetization.

Even if investors ignore the long-range model, the upgrade matters because it shows some analysts believe the market is still underestimating how much Microsoft can earn from AI once infrastructure buildout begins to normalize.

What Cramer's Big Move Call Does and Does Not Tell Investors

Jim Cramer’s comment, as cited by 24/7 Wall St. — “It's Co-Pilot's time! MSFT going higher. Big move coming.” — captures the optimistic side of the debate. It reflects a view that Microsoft may be entering a period when product traction finally starts to matter more than cost concerns.

But investors should separate sentiment from evidence. Cramer did not provide a target price, a time frame, or a detailed valuation framework in the supplied material. His call is useful as a marker of market mood, not as proof that a rerating is inevitable.

In practice, bullish commentary only becomes durable when the next earnings report confirms better unit economics, better operating leverage, or stronger guidance. Until then, it remains an opinion layered on top of an already well-known AI thesis.

What to Watch in Microsoft's Q1 Fiscal 2027 Earnings

Microsoft is scheduled to report Q1 fiscal 2027 earnings later in October. That report could be one of the most important near-term catalysts for msft stock because it may show whether AI demand is broadening enough to justify the spending pace.

The first thing to watch is Azure. The provided context says the market will test CFO Amy Hood’s guidance for 45% Azure growth in constant currency. If Microsoft clears that bar, investors may feel more comfortable that enterprise AI demand is converting into high-value cloud consumption.

The second issue is Copilot monetization. Investors do not need every detail, but they do need clearer signs that AI products are becoming financially material. Reported user growth helps, yet the market will likely focus more on whether AI can support stronger revenue mix and margins over time.

The third issue is capital intensity. If CapEx keeps accelerating faster than the business can absorb, concerns around free cash flow could continue to cap upside. On the other hand, if management shows that spending is beginning to translate into stronger commercial output, the market may become more patient.

One reason the stock still has support is earnings consistency. The supplied MarketWatch research shows Microsoft beat consensus EPS estimates in each reported quarter of fiscal 2026, with actual EPS of 4.13, 4.14, 4.27, and 4.74 versus lower estimates each quarter. That track record gives management credibility, but the next phase of the story is less about beating earnings by a few cents and more about proving AI economics at scale.

Conclusion

Microsoft still has one of the strongest AI positions in large-cap tech, but msft stock has lagged because investors want more proof that Copilot and Azure growth can outrun rising infrastructure costs. If later October earnings show stronger cloud execution, clearer AI monetization, and better cash flow discipline, the gap versus Apple and Google could start to narrow.

FAQ

1. How has Microsoft stock performed over the past year?
According to 24/7 Wall St., Microsoft stock returned about -1.28% over the past year, trailing Google and Apple by a wide margin.

2. How many paid Copilot users does Microsoft have?
According to 24/7 Wall St., Microsoft has reported 30 million paid Copilot users. In the supplied materials, that figure appears through secondary reporting rather than a direct company filing.

3. What did Melius say about Microsoft stock?
Yahoo Finance reported that Melius upgraded Microsoft from Hold to Buy on October 5 and set a $665 target price, while also raising forward EPS estimates.

4. When does Microsoft report Q1 fiscal 2027 earnings?
Based on the provided context, Microsoft is expected to report Q1 fiscal 2027 earnings later in October. A specific date was not confirmed in the supplied materials.

5. What is the biggest risk for msft stock right now?
The main risk is that AI-related capital spending remains very high while free cash flow stays under pressure, which could limit valuation upside even if revenue growth remains strong.